Power and Politic of the Global Free Trade and Supply Chain of clothing/Garment Manufacturing!

Junya Lek Yimprasert Thai Labour Campaign IGTN-Asia Email: lek@thailabour.org www.thailabour.org

Presentation flow!

Corporation/ Brands The Politic of the Industry The Global Supply Chain

Government Trade Policy

Reality

This is CSR: in Principle

The NeoLiberalism policy over South Govt

Why and What CSR Fails?

Supply Chain Management

Thailand Example

Lets change the situation

The Global Supply Chain!

Clothing/Garment Industry

Belief it or not! these brands are producing by same factories and same workers

Source: Clean Clothes Campaign. www.cleanclothes.org

Supply Chain Management

Current Outsourcing pattern of global Brands! Agent Agent Agent Supply Chain Management/ Logistics Approach

Brand
Brand Brand

CSR Codes of Conduct

GOVT Facilitate trade & investment

GOVT

Factories

GOVT Just in Time production

Cheaper/ faster/ longer

Global Clothing Supply Chain of production!

Driving by BRANDS!
AGENTS BRANDS

Small Brands Large retailers

Yarn

Textile

Materials

Clothing Manufacturing Small retailers Sub contracting factory

Fabric

Knitting Manufacturing

Home base
Responsible for manufacturing operation costs and direct employers to ten of millions workers in the industries

Informal employment, no real figure of how many million of women workers involved in clothing production at the home base level, with no protection.

The Politic of the Industry!

The Brands! The consumers countries US, EU, Japan The industrys employers associations: Have the biggest lobby power!

North

North

South
South South

North

South South
North

South

North

This is the world that is still not quite a women world !

US/EU
Mexico
NICS Taiwan, Hong Kong, Korea

Central America

1960- 1970s Expanding shipped production/ manufacturing toNICs - Korea, Taiwan, Hong Kong
1974s - MFA Relocation; North/NICs to South 1980s FDI EPZs Export promotion Zones

Southeast Asia

Africa

1995 China
After China Return to SEZs condition, facilitate by FTA? South Asia Manufacturing relocation North to South.Facilitating by trade subsidy/ promotion and Agreement

Eastern EU

India?

China

Thailands trade Agreement/Arrangement on Textile and Clothing!

Short-term Arrangement Regarding International Trade in Cotton Textiles (STA),

Long-term Arrangement Regarding International Trade in Cotton Textiles (LTA]. Extended 2 times.

MFA Phase-out
The MultiFibre Arrangement (MFA)

LDCs

Agreement on Textile and Clothing (ATC)

FTA
After 2005

1 Oct. 196130 Sept 1962

1 October 1962 to 1970

1 January 1974- 1995

1 January 1995 - 2005.

Most of the time are under some kind of trade Agreements, huge manufacturing subsidy and facilities, some how- some way but in differences name!

Thailand Example!
This is a REALLY low added value in return!

Thailand exports market on clothing!

COUNTRY
1. U.S.A 2. JAPAN

2002
1,959.7 309.1

2003
1,868.6 372.6

2004
2,083.2 429.7

2005
2,120.2 413.6

3. CHINA
4. UNITED KINGDOM 5. FRANCE 6. GERMANY 7. HONG KONG 8. U.ARAB EMIRATES 9. INDONESIA 10. NETHERLANDS TOTAL 10 COUNTRIES OTHERS TOTAL EXPORTS

119.3
251.5 102.8 134.4 154.1 132.3 85.7 98.1 3,347.0 1,795.6 5,142.6

180.0
251.2 119.9 156.3 172.9 137.3 95.4 104.0 3,458.2 2,007.1 5,465.3

266.1
295.1 181.7 162.8 191.5 161.6 126.7 128.4 4,026.8 2,373.0 6,399.9

283.3
270.4 227.1 184.5 177.4 175.4 152.6 128.0 4,132.5 2,588.7 6,721.1

product

country

value (million baht)

2001
Clothing China Hong Kong Italy 2,714.3 421.8 114.8 2,465.2 501.9 139.6

2002
2,668.7 491.6 205.8

2003
3,256.2 718.5 227.3

2004
2,588.2 544.9 352.3

2005

Cotton Fiber

USA
Australia Zimabwe

4,514.0
7,077.3 2,108.3 3,092.3 1,004.6 937.4 3,766.9 5,855.1 1,523.9 1,116.7 1,661.7 2,024.7 4,757.8 1,345.1 1,849.6 3,719.8 2,110.5 816.5 4,807.8 8,967.7 1,819.5

6,307.4
4,948.7 1,075.4 3,533.5 1,428.9 1,104.5 3,569.3 4,395.8 1,534.0 1,327.1 1,997.6 1,862.4 3,933.3 1,460.8 2,183.6 19.2 976.5 309.8 6,512.7 7,293.7 1,829.9

7,154.5
3,405.2 731.6 4,155.7 1,343.2 1,060.5 3,701.6 3,342.5 1,416.4 1,635.8 1,789.3 1,337.8 3,964.9 1,759.1 1,884.8 1,143.9 1,040.1 302.9 7,308.7 5,724.2 1,502.6

7,214.1
3,982.6 1,649.6 5,007.1 1,072.1

8,639.5
4,140.2 1,685.4 5,623.7 1,489.3

cotton fabric

China Japan Hong Kong

Man-made fabric

China Taiwan Japan

3,749.6 3,198.0 1,413.6 2,232.7 2,021.7 1,523.5 3,802.0 2,614.8 2,079.7 90.5 990.1 461.4 7,435.5 6,374.4 1,504.4

423.4 2,361.0 1,326.2 2,514.3 1,935.7 1,843.9 4,195.2 2,621.1 1,977.5 1,246.9 733.8 409.7 8,872.9 6,057.6 1,803.2

Man-made Yarn

Japan Taiwan Indonesia

Top 3, Thailand imported materials for clothing productions

Yarn

China Japan Taiwan

Knitted Fabric

Taiwan China Hong Kong

Fiber

USA Australia Japan

Textile 65,590 workers 741 factories

Synthetic Fiber 15,340 workers 17 factories

Fabric 60,470 workers 149 factories

Bleaching, Dyeing, Printing

46,750 workers 405 factories

Garment 840,460 workers 2,641 factories

knitting 118,520 workers 1,332 factories

The lowest pay [minimum wages],

80% of workers in the industry,

mostly women!

Upstream

midstream

downstream

The Stream of textile and clothing production!

2,500.0

2,000.0

1,500.0

2005 2004 2003

1,000.0

500.0

0.0 USA EU ASEAN Japan China Others

160.0 140.0

Thailands Garment Export markets

120.0 100.0 80.0 60.0 40.0 20.0 0.0 2005 2004 2003

NA M

NE S

NE SI A

LA O

G AP O R

M AR

IA

BO DI

AL AY S

PH IL IP PI

VI ET

IN DO

YA N

SI N

CA M

BR UN

EI

Outsourcing and Subcontracting Chain!

Subcontract

Family C

Family D

Family - B

Factory A in Bangkok

Family -E
Sub-contract

Sub-contract Bangkok

Sub-contract Bangkok

Sub-contract Bangkok

Sub-contract Bangkok

Sub-contract Mae Sot

Sub-contract Mae Sot

Sub-contract Korat

Manufacturing employment in Thailand

1,000 persons
6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0 2000 2001 2002 2003 2004 2005 manufacturing textile textile industry clothing

1.1 million workers, 20% of [registered] manufacturing workforces are in the garment and textile industries, with the GDP value of only 5 billions USD. Nike sale value each years is about 9 billion USD! With over 1 billion USD net profit!
Thailand Textile Institute

Average wages of textile and garment workers in Thailand in difference wage systems
12,000.0 10,000.0 8,000.0 6,000.0 4,000.0 2,000.0 Series1

wages

wages

wages

earnings

earnings

earnings

wages
Piecework

baht/day daily
Daily baht/day wages earnings

baht/month monthy
Monthly baht/month wages

baht/month piecework

baht/month Average
Average baht/month wages earnings

baht/month wages earnings

earnings

160.5

188.2

8,612.8

9,747.6

2,930.9

3,064.2

earnings

5,364.3

6,100.5

Source: Labour Standard Department, Ministry of Labour, Thailand, 2006

Minimum Wages are starving wages

200 180 160 140 120 100 80 60 40 20 0 1994 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1st level 2nd level last level

Minimum wages in Thailand has 18 level in 2006 from 143 184 Baht (USD 3.5 4.5)

7 6 5

19 94 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05

When comparing of USD, the wages has declined since 1997 economic crisis

4 3 2 1 0

1st level last level

27

Minimum wages - 2007 184/191

Provinces Bangkok, Nonthaburi, Nakornpratom, Pratumthani, Samutprakarn and Samutsakorn

181/186

Phuket
11
provinces

30

166/172 163/168 158/162 155/161 155/160 153/159

Chonburi Saraburi Nakornratchasima Rayong Ayudhya, Ranong and Chachengsao Chiengmai, Pang-Nga Krabi Kanchanaburi, Chantaburi, and Lopburi

Minimum Wages scale of 2006

10

151/156 150/151/155 150/154 147/148/152 145/150 145/149 144/148 26 / 20

provinces

Ratchaburi, Samutsongcram and Srakaew Trang, Prachaubkirikhan, Prachinburi, Singhaburi, Songkla, and Angthong Loei and Udonthani Chumporn, Trad, Lumpang, Lumpoon, Sukhothai, Suphanburi

Causing relocation and migration for lower wages

4/6

Kalasin, Khonkean, Nakornpanom, Nakornsrithammarat , Naratiwat, Burirum, Pattani, Yala, Loei, Songkha, Satoon and Nongkhai 40/ 45
provinces

143/147 142/146 141/145 140/144

Kampaengpetch, Tak, Nakornnayok, Nakornsawan, Pattalung, Phitsanulok, Petchaboon, Suratthani and Uttraradit Chainat , Chaiyaphum, Chaingrai, Mahasaracram, Mugdahan, Yasothon, Roi-ed, Srisaket , Sakonnakorn, Nongbualumpoo and Uthaithani Pichit, Maehongsorn, Surin, Ubonratchatani and Amnatchareon Payao and Phrae
28

The Neo-Liberalism policy in South Govt

power play within the South government, mostly under militaries, authoritarian or undemocratic systems!

I wont responsible for any damage!

World is for SELL!

Leave whenever I WANT!
Do anything I WANT! Go where ever I WANT!

Corporation

War Against Terrorism

Government

Criminalization of Citizens

H e g e m o n y A p p r o a c h

TNCs Powerful Nation

Monopoly of Trade
CSR - Corporate PR tactics
WTO/FTAs World Take Over

U n e q u a l

Top North Market base economy

Donors/loan/aid money/charity
Fashionable short term Project

T r a d e
O f f

Politician VS Citizens conflict of interest

P o w e r

Down South
World of diversities Rights-Freedom of Association

Life long struggle

So! Here is the reality!

Huge gab of profit sharing from brands to workers! Workers around the world are exploited! Most of the them are women

Salaries for clothing executives

CEO
Philip Marineau

Company

Annual Salary

Hourly Wage
$11,971

Levi Strauss & Co. $24.9 million

Tommy Hilfiger Tommy Hilfiger Corp.

Ralph Lauren Paul Charron Liz Claiborne Inc.

$22.4 million

$10,769
$2,163 $1,500

Polo Ralph Lauren $4.5 million $3.12 million

Paul Fireman
Philip Knight

Reebok
Nike

$3.1 million
$2.73 million

$1,490
$1,312

www.sweatshopwatch.org

Comparison of executives and workers salaries

Workers CEOs Workers annual salary Hourly wage Years of work to earn the executives annual salary

Thailand China Philippines India Cambodia Indonesia

Levi Strauss & Co. Tommy Hilfiger Polo Ralph Lauren Liz Claiborne Inc. Reebok Nike -

$1,248 $786 $1,416 $540 $540 $600

$0.5 $0.32 $0.63 $0.22 $0.22 $0.24

19,951 28,498 3,177 5,777 5,770 4,550

Susan George
The North-South differential was about 2 to 1 in the 18th century, 30 to 1 in 1965 and is now 80 to 1 and rising. Many of you will also have heard the comparison between the billionaires and the billionsnot a scientific comparison, but striking. The combined assets of the world's 440-some dollar billionaires is equivalent to the net worth, as measured by GDP share, of roughly half the world's people.

This is CSR: in Principle!

ILO cores convention Over 400 Corporate Codes of Conducts UN Global Compact MDG FTA

ILO Fundamental Principles and Rights at Work Conventions:

Convention 87
Convention 98 Convention 29 Convention 105 Convention 100 Convention 111 Convention 138 Convention 182

Freedom of Association and the Right to Organise The Right to Organise and Bargain Collectively Forced Labour Abolition of Forced Labour Equal Remuneration Discrimination (Employment and Occupation) Minimum Age Convention Prohibition and Immediate Elimination of the Worst forms of child labour

Corporate Codes of Conduct

Fare Wear Foundation

No forced labour No discrimination of workers No child labour Freedom of association and the right to collective bargaining Payment of a living wage (i.e., a salary that covers the basic needs of an average family, based on local standards) No excessive overtime Safe and healthy work environment Legally-binding labour relations

Freedom of Association

19 counties yet to ratify both convention US, China, India, Thai, Laos, Vietnam, Korea, Timor, Africa, Emirate, Iran, Samoa, Solomon, Somalia

87 no intervention by state and employers 98 protection of corrective bargaining right

Thailand ratifies only 14 ILO conventions out of nearly 190 conventions.

Ratification date 05:04:1968 05:04:1968 26:02:1969 05:12:1947 26:02:1969 08:02:1999 29:07:1964 02:12:1969 24:09:1962

Convention C14 Weekly Rest (Industry) Convention, 1921 C19 Equality of Treatment (Accident Compensation) Convention, 1925 C29 Forced Labour Convention, 1930 C80 Final Articles Revision Convention, 1946 C88 Employment Service Convention, 1948 C100 Equal Remuneration Convention, 1951 C104 Abolition of Penal Sanctions (Indigenous Workers) Convention, 1955 C105 Abolition of Forced Labour Convention, 1957 C116 Final Articles Revision Convention, 1961

Country Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand

Status ratified ratified ratified ratified ratified ratified ratified ratified ratified

C122 Employment Policy Convention, 1964

C123 Minimum Age (Underground Work) Convention, 1965 C127 Maximum Weight Convention, 1967

Thailand
Thailand Thailand

26:02:1969
05:04:1968 26:02:1969

ratified
denounced on 11:05:2004 ratified

C138 Minimum Age Convention, 1973

C182 Worst Forms of Child Labour

Thailand
Thailand

11:05:2004
16:02:2001

ratified
ratified

Why and What CSR Fails?

Voluntary, PR purpose, no intention to implemented!
Organized/unionised sectors Uuorganized/very weak union sectors
Male

dominated industries, Automobiles, Textiles, State enterprises, reduction of unionized sectors, through
Privatization Union

women

concentrated industry

facing heavily pressure from flexibilisation employment,

piece rate system Part time, casual, contract employment increasing high speed machines

busting
In

Unionized sectors are male dominated the national labour congress/center is being co-opted by state and employers

the informal sector employed vulnerable migrant workers FTA floating of rights, wages, welfare to facilitate FDIs and local capitalists

Highest profit/ cheapest cost

FLEXIBILITY

Reducing risks, used less workers, cheapest wages, no liability, no responsibility, no direct employment, etc.

CAPITALISTs

INCREASE PRODUCTION

Employment in temporary, parttime, contract system Target/ piece rate system, home base workers Subcontracting , push pressure to workers Investment privilege package, EPZs Flexible labour law for investment ATC, Free Trade

Supply Chain Management Multi skills/ less workers In crease speed, work like robot, no time to eat, to pee, to rest. Using vulnerable workers, children, immigrant, prisoners Too many OT, no time to participate in union

workers are suppressed -- no time to eat [nothing to eat], to rest, to have family life, etc.

Wal-Mart produced in 48 countries, same as other big brands

India, China, US and Japan, are the top suppliers of materials

Hong Kong and China Business groups become the biggest producers of Garment

Over 50 South countries were made to complete with other to keep the sweatshop industry! On the expenses of their women populations

Monthly wages, garment workers in Asia

Burmese Sri Lanka Vietnam pakistan Cambodia Indonesia US$ India China Malaysia Thailand Philippine Taiw an 200 400 600 800 1,000

Low wages is the push factor for labour migration both domestic and regional level.

CSRs Internal Monitoring

The personnel will inform us in advance that customers will monitor the factory. Told us that Haddad, that Nike will monitor the factory and that we have to be ready and have to lie to the customer. He said that the customer will ask us, Do you work OT? We have to say No! The customer will ask that Do pregnant workers work OT we have to say that No. But in reality pregnant workers work OT and on Sunday as well. We work sometime 2 AM or till dawn, but we have to say that we work OT only at 8 PM. Whatever we can lie, they said that we have to lie. Also what is important that we have to have cloth-mask and a glass. If we can lie we will get paid 400 Baht.

Lets change the situation

Lets stop talking on 100 ways we are going to lose and focus on the ONLY we are going to win by FIGHTING TOGETHER! Tri-angular Solidarity Unity across the sectors and movement collective fight Freedom of Association is at the center!

Environmental sustainability International Standards

Government

Corporation Stop Exploitation!

Welfare State!
Social Welfare system

Enforce laws

Freedom of Association

Horizontal approach equality, respect, solidarity

Mass mobilization Beyond dialogue
Trade unions

local action
Consumers NGOs Donors

Global solidarity
Others

Movements
Individuals

Academics

Women

Diversity
Natural resources Cultures politics Ways of living

Sovereignty

Rights

Self subsistence Self determination Land Water Forest Costal Food etc.

Human rights Labour rights Women rights Environmental rights Participatory democracy Social welfare and security etc.

Peoples
Tribes/ believes/ Religions, LGBT, etc.

Union is a tool to good life and Security

Political Rights
Workers party Democratic laws Strike Union office/ facilities CBA Learning/ Education Organizing Activities leaves

Economic Rights
Living wage Bonus Pension Subsidy Food allowance

Workers

Transportation, etc. OS&H --Safe and Healthy work Sick leaves Leaves- holiday, annual

Compensation, Provident fund

Social Welfare

Unemployment Security

Family benefit

Maternity benefit

Legal Rights

Social Rights

workers trying Global Supply Chain! Tri-angular

Solidarity to support workers rights to Freedom of Association

AMRC& TLC proposal

to organise against exploitation

The impact to workers

Freedom Of Association
Western TUS/NGOs pressuring brand names and retailers Asian TUs/ ATNC monitoring groups pressuring manufacturers

Workers Right before Profit!

Brands to share more profit wither their workers South government to Stop trade off women and families life and well being with trade! South government stop compete with each for very low added value industry. Promote Union made or Workers factory Support new jobs opportunities Rehabilitation support -- back to villages

Solidarity Group!
Dignity Returns
Factory by workers, for workers and of workers. Stop subcontracting ethical made Honor international standard Paying living wage promote their own brands Dignity Returns

WE have to.

OPEN our EARS to listen to people cries. OPEN our EYES to see the oppression in our society! And OPEN our MOUTHS to shout STOP!. It is ENOUGH!.

 ...
Su Mai Su ... Su Su Will we Fight Fight, Fight